Grocery chain Haggen filed for Chapter 11 bankruptcy protection after months of struggling to expand into new states.
Filed in the U.S. Bankruptcy Court for the District of Delaware, Haggen claimeded an estimated $215 million in financing from lenders to keep operations running, the Los Angeles Times reported.
"The action we are taking today will allow us to continue to serve our customers and communities while providing Haggen with a process to realign our operations to be positioned for the future," Haggen CEO John Clougher said in a statement.
The company did not say how many of its 10,000 employees would be affected by the filing.
The Washington-based grocer has experienced rough times since buying 146 Albertsons, Vons, Safeway and Pavilions stores last summer for $9.2 billion. The company had gone from an 18-store chain to a regional player in five states: Washington, Oregon, California, Arizona and Nevada.
However, hanging its banner name across the new acquisitions did not prove to help win over shoppers. Last month, Haggen announced the closing of 27 locations, and had already cut worker hours and laid off some employees.
What went wrong? Analysts believe that Haggen underestimated the number of alternative grocers available to shoppers. And, the previously smaller chain may not have been prepared for such an quick and large expansion.
The bankruptcy announcement comes just days after Haggen filed a lawsuit against Albertsons claiming that the 146 acquired properties were part of a larger scheme by Albertsons to unload underperforming stores.
-See this Los Angeles Times article
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